Short Answer: Install readline and readline-devel via yum and then recompile readline in ruby

The issue could be the following.
1. Make sure readline and readline-devel are installed: yum list *READL*
2. If not installed both via yum: yum install readline readline-devel
3. rebuild and make the ruby extension for readline: cd ruby-source/ext/readline; ruby extconf.rb; make; make install